TAILIEUCHUNG - Lecture Fundamentals of corporate finance - Chapter 20: Credit and inventory management

After studying this chapter, you should understand: How firms manage their receivables and the basic components of a firm’s credit policies, how to analyze the decision by a firm to grant credit, the types of inventory and inventory management systems used by firms, how to determine the costs of carrying inventory and the optimal inventory level. | Chapter Outline Chapter 20 Credit and Inventory Management Chapter Organization Credit and Receivables Terms of the Sale Analyzing Credit Policy Optimal Credit Policy Credit Analysis Collection Policy Inventory Management Inventory Management Techniques Summary and Conclusions More on Credit Policy Analysis CLICK MOUSE OR HIT SPACEBAR TO ADVANCE Irwin/McGraw-Hill copyright © 2002 McGraw-Hill Ryerson, Ltd. Credit and Inventory Management: Key Issues Key issues: What is the tradeoff between a flexible versus a restrictive credit policy? What are the components of an inventory management system? Preliminaries: credit policy Analysis of a credit policy change Credit information and evaluation of customer credit capacity Preliminaries: inventory policy Use of EOQ inventory model Extensions of EOQ model Inventory management systems Components of Credit Policy Terms of sale The conditions under which a firm sells its goods and services for cash or credit. Credit analysis The process of determining the probability that customers will not pay. Collection policy Procedures followed by a firm in collecting accounts receivable. The Cash Flows from Granting Credit Credit sale is made Customer mails check Firm deposits check in bank Bank credits firm’s account Cash collection Accounts receivable Time Determinants of the Length of the Credit Period Several factors influence the length of the credit cycle. Among these factors are: Perishability and collateral value Consumer demand for the product Cost, profitability and standardization Credit risk of the buyer The size of the account Competition in the product market Customer type Credit Policy Effects Revenue effects Payment is received later, but price and quantity sold may increase Cost effects Running a credit department and collecting receivables has costs The cost of debt The firm must finance receivables and, therefore, incur financing .

• Tài chính doanh nghiệp
• Corporate finance
• Fundamentals of corporate finance
• Tài chính doanh nghiệp
• Business organization
• Financial management
• Inventory management
• Intermediate corporate finance
• Lecture Intermediate corporate finance
• Corporate valuation
• Value based management
• International corporate finance
• Capital market history
• Raising capital
• Financial leverage
• Financial reporting
• Social welfare
• Forward contracts
• The stock markets
• Basic return concepts
• Portfolio theory
• Bond valuation
• Basic stock valuation
• Accounting for financial management
• Analysis of financial statements
• Financial planning
• Forecasting financial statements
• Capital budgeting
• Decision criteria
• Estimating cash flows
• Real options
• Capital structure decisions
• The levered firm
• Cash management
• Financial distress
• Hedging risk
• Warrants and convertibles
• Principles of corporate finance
• Understanding options
• Valuing options
• Financial analysis
• Financial manager
• Financial institutions